Irish stock market closes sharply higher in line with European bounce

The Irish stock market closed sharply higher yesterday, as European markets continued to gain back ground following the massive falls in the wake of the Brexit vote.

The ISEQ index rose to 5,482.69, ahead of its low of 5,286.65 hit on Friday, following the announcement that the UK had voted to leave the European Union. Irish equities had fallen 13 per cent in two days as investors rushed to shed risk following the vote and the uncertainty that followed. On Tuesday the ISEQ gained 3.5 per cent, with the biggest rises in financial stocks. The ISEQ financial index gained 10 per cent.

British prime minister David Cameron is in Brussels to meet with his European counterparts as EU leaders call for a swift clarification on its position regarding its plan to exit the European Union.

Bank of Ireland started the session strongly, with a 6.5 per cent increase in its share price in early trading, and continued to build on that momentum. Its stock rose more than 8 per cent to 18.39 cent by early afternoon and closed up more than 10 per cent at 18.8 cent. Merrion Stockbrokers this morning named Bank of Ireland among the list of stocks most likely to be negatively affected by sterling weakness and a slowdown in the UK, along with Kerry Group, Kingspan, Origin Enterprises, C&C, Ryanair, ICG and Dalata, among others.

The bank had planned to return to paying a dividend next year for the first time since 2008, but that is now viewed as being at risk.

Ryanair stock, meanwhile, was up more than 4.5 per cent to €10.94, before closing up 3.1 per cent at €10.79. The company had started the session at close to 5 per cent higher than the previous day’s close before falling back slightly. The airline said it would be unlikely to add any new aircraft to British bases next year, opting for European hubs instead. Chief executive Michael O’Leary has said in the run-up to the vote that the airline would cut investment in the UK if the country voted to leave.

Shares in CRH gained 4.8 per cent to close at €24.43, while Kingspan gained more than 7 per cent.